SAN FRANCISCO — President Joko Widodo pledged to further open Indonesia’s economy and draw more foreign ­investment amid signs of an economic recovery.

Delivering the keynote speech at a business conference in San Francisco on Thursday (Feb 18), Mr Widodo said Indonesia’s announcement last week to open up 35 subsectors of its economy to foreign investors for the first time and allow majority foreign stakes in 100 others did not go far enough.

Although it was the most significant liberalisation in a decade, Mr Widodo said: “I’m not satisfied. Please understand that we are still only at the beginning. We will still continue to simplify, continue to open up, continue to modernise our rules and regulations.”

He then quoted a famous movie line from Hollywood star and former California governor Arnold Schwarzenegger in pledging to make processes easier for foreign companies. “There are still many excessive permits, licenses and restrictions to which we will say, ‘Hasta la vista (farewell), baby’,” he said, drawing ­applause from the audience of 300, comprising mainly American business leaders.

Mr Widodo also painted an optimistic picture of the Indonesian economy.

“Even as the stock markets in China declined significantly, and stock markets in the US declined, our currency (rupiah) remained stable and our stock market went down by a little bit,” he said, adding that Indonesia achieved 5.04 per cent year-on-year economic growth in 2015 — higher than projections of 4.8 per cent.

Bank Indonesia Deputy Governor Perry Warjiyo on Thursday said the country’s economic growth may reach 5.4 per cent this year, after the central bank  cut its main interest rate 50 basis points in the first two months of 2016.

Indonesia was stung early last year by the falling rupiah and its lowest economic growth since 2009, but the President reshuffled his Cabinet in August, appointing more technocrats to turn the situation around. 

The Indonesian President has also carried out a series of reforms, introducing large-scale deregulation and new plans to fast-track licensing for crucial infrastructure projects. Foreign direct investment began to pick up in the fourth quarter of last year, after stagnating in 2014.

Despite the various reforms, Mr Widodo is intent on doing more. “Our investor environment is still not conducive enough. We still need to deregulate more,” he said at the conference, organised by the US-ASEAN Business Council.

He added that the Indonesian government is prepared to bite the bullet for economic reforms and think long term, even if the measures may not be popular with the people.

“When we are wrong, we must admit that we are wrong and change our ways …  When we must do what is not popular, we must be prepared to be unpopular,” he said.

After speaking at the conference, Mr Widodo travelled to Silicon Valley to visit tech giants such as Facebook, Google, and Plug and Play, with the aim of promoting Indonesia’s plan to develop e-commerce and a digital-based economy. At Facebook’s headquarters, he met its CEO, Mark Zuckerberg, and invited the social networking giant to join Indonesia’s efforts to battle radicalism.

“I urge Facebook to spread the message of tolerance, moderation and peace,” said Mr Widodo in a press statement after the visit. 

Facebook has more than 1 billion active users globally and is rapidly increasing in numbers in Indonesia, which has the fourth-most Facebook users in the world, with about 65 million active users.

With terrorist groups such as ­Islamic State (IS) using social media to fan the flames of radicalism and recruit potential fighters, Mr Widodo said governments need to spread a counternarrative of peace and tolerance on social media.

At the end of his visit, he wrote a short message, “Together with peace in harmony”, on Facebook’s signature wall.

He also expressed similar sentiments to US President Barack Obama and leaders from the Association of Southeast Asia Nations (ASEAN) a day earlier, in a discussion on counterterrorism at the US-ASEAN Summit in Sunnylands, California.

The leaders also discussed ways to deepen economic cooperation, announcing linkages such as the ASEAN-US Connect Initiative with dedicated centres set up in Bangkok, Jakarta and Singapore.

Mr Keith Williams, president of global safety science consultancy UL LLC and chairman of the US-ASEAN Business Council told reporters that both big and small companies can benefit from the initiative. “If you are an American SME (small and medium enterprise) or startup and want to invest in ASEAN (or vice versa), you may be totally lost on how to go about it. Connect can help you to jumpstart your small business,” he said. “If you are a really large business, it is very useful also to have an organisation like the Connect that can help you deal with regional (political or trade) issues that may be getting in the way of the business growing or expanding.”

US Trade Representative Michael Froman said other measures include the ASEAN-US trade workshops to enhance understanding of the Trans-Pacific Partnership (TPP) trade pact now undergoing ratification in the 12 signatory countries. Four ASEAN countries (Brunei, Malaysia, Singapore and Vietnam) have signed the TPP, which accounts for 40 per cent of global output, while other member states, including Indonesia and Thailand, have indicated an interest in joining the agreement in future.

Correction: In an earlier version of this article, we said the president of global safety science consultancy UL LLC and chairman of the US-ASEAN Business Council is Mr Keith Harris.  This is incorrect.  It should be Mr Keith Williams.  We are sorry for the error.